Iluka Resources has achieved strong results from its mineral sands operations in 2018, including a new production record for synthetic rutile.
It is good news for Iluka as the company plans to launch the $275 million Cataby project in Western Australia in the first quarter of 2019.
Iluka managing director Tom O’Leary said Cataby had entered the commissioning phase “on time and on budget”.
In addition to the Cataby development, Iluka also plans to shift its mining operations at Jacinth-Ambrosia (the world’s largest mineral sands operation), located in the Eucla Basin region of South Australia, from the Jacinth North area to the Ambrosia area in the fourth quarter of 2019.
It is also working on the Lanti and Gangama expansions in Sierra Leone for commissioning in mid-2019.
These two projects, along with some decommissioning works, are expected to contribute to an estimated $330 million capital expenditure for Iluka in 2019.
The company’s full-year revenue was up 22 per cent to $1.24 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) was up 66 per cent to $600 million. The company also recorded net profit after tax of $304 million.
Iluka’s main products from its heavy mineral sands operations include zircon, rutile and synthetic rutile, which is primarily composed of the titanium compound ilmenite.
Zircon production was particularly strong for Iluka in 2018 at 349,000 tonnes, up 12 per cent on the previous year and around 5 per cent higher than its 330,000-tonne guidance.
The company also posted record synthetic rutile production of 220,000 tonnes from the SR2 kiln in Capel, Western Australia. This was the highest annual production recorded at SR2 since its launch in 1997.
However, natural rutile production was down 46 per cent to 163,000 tonnes. Iluka cited the closure of its processing facilities at Murray Basin and a strike at its Sierra Rutile operation in Sierra Leone as reasons for the dip.
Globally, zircon and rutile prices have been in the ascent due in part to tightened supply. Iluka’s weighted average price for zircon and rutile reflected this trend, increasing by 41 per cent to $US1351 a tonne and 21 per cent to $US952 a tonne respectively.
Also in line with this trend, the company’s sales of zircon, rutile and synthetic rutile were down by 7 per cent in 2018 “reflecting production constraints”.
“Iluka’s Australian operations performed exceptionally well in 2018. Annual production from the SR2 kiln in Western Australia was the highest it has ever been since the kiln was commissioned in 1997,” said O’Leary.
“At Jacinth-Ambrosia in South Australia and the Narngulu mineral separation plant in Western Australia, higher than expected ore grades and improved recoveries have helped the company to build stockpiles which will be used to smooth future production.”
The company announced a final dividend of 19 cents per share for the year.